New Strategy for Condoms

Are condom manufacturers getting gutsy

or what?

Just a couple of years ago they were practically begging retailers to stock their merchandise, telling them that putting condoms on the open shelves would not embarrass any consumers or cause an increase in pilferage.

Now they suggest that retailers not only carry condoms on open shelves but also place them in multiple locations throughout the store.

Condoms in the cereal aisle? you ask. Well, not quite, say suppliers. But they insist their products could sell very well in displays placed in areas like hardware and housewares, and in health and beauty care areas beyond feminine hygiene and men's care. Of course, suppliers say that retailers still need to be careful not to place the category in areas where the traffic includes a large percentage of children.

But why expand condoms' presence in the first place? Suppliers say it is simply because of the profit potential. According to a study conducted by Michael F. Carey, Inc., condoms deliver the highest profit per square foot of shelf space of any HBC category. Says Richard Kline, group vice president of personal products marketing at Carter Products, manufacturer of the Trojan brand, "Condoms are about six times more profitable than the average HBC segment. Retailers would most likely improve overall HBC profits by expanding the space given to condoms."

Mark McGreevy, director of food store sales for Norcross, Ga.-based Durex, makes a similar point. "Price appears not to be the determining factor when it comes to condom sales," he says. "Studies have shown that supermarkets have the opportunity to do very well by offering higher priced, premium range products that offer unique selling points."



The aim is to get condom sales growth back to the heydays of the late 1980s, when volume increased by solid double-digit rates for about four straight years. Since then, growth has slowed considerably but is starting to pick up speed again. According to ACNielsen, dollar sales have grown about three percent over the past year in all mass outlets. Current growth during the first quarter of 1998 is about seven percent in all outlets. Overall growth is led by mass merchandisers, which posted a solid 11 percent increase, while drug stores showed a seven percent jump in volume. Supermarkets, perhaps because of a lack of space commitment, showed the smallest gain, three percent.

McGreevy believes the drop-off in sales from the highs of the 1980s is largely due to baby boomers aging out of the category. "Our growth market is non-monogamous, sexually active young people," he explains. "We need the next generation to replace sales of the aging baby boomers. This